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EXHIBIT 2.6
FIRST AMENDMENT TO
MERGER AGREEMENT AND
PLAN OF REORGANIZATION
AMONG
CHESAPEAKE ENERGY CORPORATION,
CHESAPEAKE MERGER II CORP.
AND
ANSON PARTNERS LIMITED PARTNERSHIP
DECEMBER 15, 1997
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TABLE OF CONTENTS
Page
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1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Amendment to Section 1.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Amendment of Section 1.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4. Amendment to Section 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
5. Amendment to Section 9.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
6. Amendment of Exhibit 1.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
7. Supersession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
8. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
EXHIBITS
"1.9" Form of Registration Rights Agreement
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FIRST AMENDMENT TO
MERGER AGREEMENT AND
PLAN OF REORGANIZATION
THIS FIRST AMENDMENT TO MERGER AGREEMENT AND PLAN OF
REORGANIZATION (the "Agreement"), is entered into this 15th day of December,
1997, among CHESAPEAKE ENERGY CORPORATION, an Oklahoma corporation ("CEC"),
CHESAPEAKE MERGER II CORP., an Oklahoma corporation ("CMC"), ANSON PARTNERS
LIMITED PARTNERSHIP, an Oklahoma limited partnership ("AP") and ANSON
PRODUCTION CORPORATION, an Oklahoma corporation ("APC").
R E C I T A L S :
A. AP, APC, CEC and CMC have entered into that certain Merger
Agreement and Plan of Reorganization dated October 22, 1997 (the "Merger
Agreement") and such parties desire to amend the Merger Agreement pursuant to
this First Amendment to Merger Agreement and Plan of Reorganization (the
"Amendment") to: (a) extend the Closing Date; (b) amend the terms of the
adjustment to merger consideration; and (c) to delete the Registration Rights
Agreement attached to the Merger Agreement and substitute therefor, the
Registration Rights Agreement attached to this Amendment.
NOW, THEREFORE, for and in consideration of the recitals and
the mutual covenants and agreements set forth in this Amendment and for the
purpose of amending the terms and conditions for the Merger, the parties hereby
agree as follows:
1. Definitions. Unless otherwise defined herein, all terms defined in
the Merger Agreement will have the same meanings herein as therein defined.
2. Amendment to Section 1.7. Section 1.7 of the Merger Agreement
entitled "Payment and Conversion" is hereby deleted in its entirety and the
following Section 1.7 i hereby substituted therefor:
"1.7 Payment and Conversion. Subject to the terms and conditions
of this Agreement, on the Closing Date, pursuant to the
Oklahoma Act, APC will be merged with and into CMC and upon
such Merger, the APC Shares will be automatically converted
into the right to receive the number of shares of CEC Common
Stock determined by dividing FORTY-THREE MILLION DOLLARS
($43,000,000.00) by the Exchange Price (the "Exchange
Shares"). The AP Group and the CEC Group hereby agree that
the "Exchange Price" will be $11.3375 which was determined by
adding the closing price of the CEC Common Stock as quoted on
the New York Stock Exchange as of the close of business on the
third (3rd) through the twelfth (12th) business trading days
preceding October 31, 1997 and dividing the sum by ten (10).
The number of Exchange Shares will be rounded up to the
nearest whole number and no fractional shares will be issued."
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3. Amendment of Section 1.9. Section 1.9 of the Merger Agreement
entitled "Adjustment to Merger Consideration" is hereby deleted in its entirety
and the following Section 1.9 is hereby substituted therefor:
"1.9 Adjustment to Merger Consideration. CEC and AP hereby agree
that in connection with the sale of any Exchange Shares during
the Adjustment Period (hereinafter defined), as set forth in
the Registration Rights Agreement attached hereto as Exhibit
1.9 (the "Registration Rights Agreement"): (a) to the extent
that the proceeds received by AP net of the amount of the
underwriting discounts and commissions on a per share basis,
as adjusted to account for any stock splits, stock dividends
or other distributions (excluding cash dividends) in respect
of the Exchange Shares (the "Per Share Price") does not equal
or exceed the Exchange Price, CEC will or will cause CMC to
pay to AP an amount equal to the difference between the Per
Share Price and the Exchange Price multiplied by the number of
Exchange Shares actually sold pursuant to such registration;
and (b) to the extent the Per Share Price exceeds one-hundred
twenty percent (120%) of the Exchange Price, AP will pay CEC
an amount equal to the difference in the Per Share Price and
one hundred twenty percent (120%) of the Exchange Price
multiplied by the number of Exchange Shares actually sold
pursuant to such registration. As used in this paragraph, the
term "Adjustment Period" means the period commencing on the
day in April, 1998 on which AP first sells Exchange Shares and
continuing for thirty (30) days thereafter, regardless of how
many New York Stock Exchange trading days actually occur
during such thirty (30) day period. AP hereby covenants and
agrees that all sales of Exchange Shares will be made in a
commercially reasonable manner so as not to unduly create
price fluctuation in the Common Stock. Any cash adjusting
payments to be made pursuant to this Section 1.9 will be made
by the party owing payment within five (5) days after the
final account has been made and agreed to by CEC and AP."
4. Amendment to Section 2. Section 2 of the Merger Agreement entitled
"Closing" is hereby deleted in its entirety and the following Section 2 is
hereby substituted therefor:
"2. Closing. Subject to the terms and provisions hereof, the
closing of the transactions provided for herein (the
"Closing") shall occur at 10:00 a.m. at the offices of Self,
Xxxxxxx & Xxxx, Inc., 2725 Oklahoma Tower, Oklahoma City,
Oklahoma on or before December 19, 1997 (the "Closing Date")
unless another date, time or place is agreed to in writing by
the parties hereto, but in any event will be effective as of
12:01 a.m. Oklahoma time on November 1, 1997 (the "Effective
Time")."
5. Amendment to Section 9.2. Section 9.2 of the Merger Agreement
entitled "Production Payments" is hereby amended by the addition thereto of the
following sentence:
"Notwithstanding the two (2) year limitation set forth in
Section 10.2 of this Agreement, AP hereby agrees that the
indemnification provisions set forth in
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Section 10.4 hereof will apply in all respects relating to the
Production Payments for the entire life of the Production Payments.
6. Amendment of Exhibit 1.9. The form of Registration Rights Agreement
attached to the Merger Agreement as Exhibit 1.9 is hereby deleted in its
entirety and the form of Registration Rights Agreement attached hereto as
Exhibit 1.9 is hereby substituted therefor.
7. Supersession. It is agreed and understood between AP, APC, CEC and
CMC that: (a) except to the extent the Merger Agreement is amended by this
Amendment, the Merger Agreement will remain in full force and effect; (b) the
Merger Agreement as amended by this Amendment supersedes any and all prior
agreements entered into between the parties; (c) subject to the satisfactory
performance of the terms and conditions stated in the Merger Agreement unless
otherwise stated herein, this Amendment will be effective as of the date hereof
but will be binding on the parties only after execution hereof by all parties
hereto; and (d) in all respects, except as specifically amended hereby, the
Merger Agreement remains in full force and effect and unabated and AP, APC, CEC
and CMC hereby reaffirm each and every representation, warranty, covenant or
condition made in the Merger Agreement as if and to the same extent as if made
on the date of the execution of this Amendment.
8. Counterparts. This Amendment may be executed in multiple
counterparts, each of which will be an original instrument, but all of which
will constitute one agreement.
IN WITNESS WHEREOF, the parties have executed and delivered
this Amendment as of the day and year first above written.
CHESAPEAKE ENERGY CORPORATION,
an Oklahoma Corporation
By: /s/ XXXXXX X. XxXXXXXXX
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Xxxxxx X. XxXxxxxxx
Chief Executive Officer
CHESAPEAKE MERGER II CORP., an
Oklahoma Corporation
By: /s/ XXXXXX X. XxXXXXXXX
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Xxxxxx X. XxXxxxxxx,
President
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ANSON PARTNERS LIMITED
PARTNERSHIP, an Oklahoma
Limited Partnership
By: /s/ XXXX X. XXXXXXXX, III
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Xxxx X. Xxxxxxxx, III, Sole
General Partner
ANSON PRODUCTION CORPORATION,
an Oklahoma corporation
By: /s/ XXXX X. XXXXXXXX, III
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Xxxx X. Xxxxxxxx, III,
President
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